We attempted to localize where inside the antigen-presenting cell antigen processing takes place. Variants of CHO cells, possessing temperature sensitive mutations in their ability to acidify endosomes, but not lysosomes, were transfected with MHC class II genes to allow them to present antigens to T cell hybridomas. At the nonpermissive temperature these cells were impaired in their ability to present intact foreign antigens, which require processing, but not in their ability to present peptide fragments, which do not. These results suggest that the endosome is one intracellular organelle where antigen processing takes place. In a related study with these cells, we demonstrated that uptake via the mannose-6-phosphate receptor of the precursors of cathepsin L, an acid protease, could interfere with antigen processing of molecules whose determinants were cleavable by the enzyme when the two were administered simultaneously. This observation argues that antigen passes through an acidic compartment during some phase of antigen processing. Finally, we have functionally mapped the structure of a second T cell antigenic determinant, identifying residues that interact with the MHC class II molecule, and residues that interact with the T cell receptor. An analysis of the spatial relationship of these residues suggests that the determinant does not assume a pure alpha helical secondary structure when bound to the MHC class II molecule.